France wants changes to EU financial transaction tax

PARIS

French Minister of the Economy and Finances Pierre Moscovici attends the questions to the government session at the National Assembly in Paris July 9, 2013.

Reuters/Charles Platiau

PARIS (Reuters) - France's finance minister said on Thursday that a European Commission proposal for a financial transaction tax must be improved so it can be implemented in the European Union as a whole and not discourage investors.

The tax, proposed by the EU executive as a way of making banks contribute to the cost of cleaning up after the financial crisis, resurrects an idea first conceived by U.S. economist James Tobin more than 40 years ago.

"To get to this tax we must be pragmatic and realistic," Pierre Moscovici told a financial conference. "The European Commission's proposal seems to me to be excessive and risks being counter-productive."

Having failed to persuade all 27 EU member states to sign up, eleven countries led by France and Germany have agreed to press ahead with the levy.

But Italy and France have expressed concerns about widening the tax beyond shares to government debt as both believe it could discourage investors from buying their bonds.

"I want to work on improving the Commission's proposal so that we have a tax that does not undermine the financing of the economy," Moscovici said, adding that the tax must be designed in a way that means it can be applied more generally throughout the EU.

Algirdas Semeta, the EU's commissioner in charge of tax policy, said last week that Europe could scale down the proposed tax, signalling for the first time readiness to soften a scheme which some fear could backfire.

Semeta's comments showed growing concern in Brussels that the alliance of 11 countries could falter.

Officials told Reuters in May of plans to drastically scale back the levy, cutting the charge by as much as 90 percent and delaying its full roll-out.

Moscovici also renewed calls for France's banks and insurers to buy into the capital of the Euronext stock exchange, due to be spun off in a public offering. The government is keen to get the exchange, now part of transatlantic market operator NYSE Euronext NYX.N, back into European hands.

"This is an issue for France, this is an issue for the euro zone," Moscovici told the same conference.

"This opportunity can be seized if, and only if, the stock exchanges in Paris, Lisbon, Brussels and Amsterdam share the same vision of Euronext's future ... and it implies in particular that major players in the Paris bourse are ready to mobilise to stabilize the shareholding of the new Euronext."